PZ CUSSONS, maker of Imperial Leather, is to close its Nottingham factory with the loss of 160 jobs as customers shun old-fashioned bars of soap in favour of liquid varieties.

The factory, which has been making soap since 1955, will shut in 2007 and production will be switched to Thailand. Soap bars produced in Nottingham now only account for 17 per cent of the group's UK sales, down from more than half of sales in 1995.

Graham Calder, finance director of PZ Cussons, said, "Bars of soap are becoming less popular in the UK and it is more cost effective for us to move to Thailand, where we are investing in a new state-of-the-art factory. Demand for soap bars in Asia is rising."

The Far East now accounts for two-thirds of the world market for soap bars, and PZ Cussons already has produc-tion centres in Thailand and Indonesia.

The news of the closure came as PZ Cussons, which began trading in Sierra Leone in 1879, announced it was withdrawing from Russia and China. The group has been hit by the weakening of the rouble, which has made the investment needed to promote its brands expensive, and a new distribution network has failed to improve sales.

It has also failed to succeed in China, blaming competitive pressures. "We have been in China for about 10 years but have been losing money," Mr Calder said. "It is very competitive and we are plagued by counterfeit goods there."

A pounds 3m loss in Russia and losses in China caused the company to report a 4 per cent drop in pre-tax profits for the six months to the end of November. It has also been hit by the weak US dollar, as more than half of its business is in currencies that are linked to the dollar.

"Rising oil costs have also affected us," Mr Calder said. "That increases the costs of our packaging as well as some of the raw materials used in our products."

The company also owns the Original Source shower gel brand and Charles Worthington hair products.